As reported by the Journal Inquirer, April 12, 2007.

Rell Crafting Plan for UConn Health Center

By Keith M. Phaneuf

HARTFORD - Gov. M. Jodi Rell didn't recommend any special assistance for the financially troubled University of Connecticut Health Center in her budget proposal unveiled in February.

But the governor's budget director told a legislative panel this week that the administration is crafting alternatives to help the Farmington-based center, and wants to sit down with lawmakers and UConn officials before the legislative session ends June 6.

Office of Policy and Management Secretary Robert L. Genuario declined to discuss specifics, but hinted that one option could include bolstering Medicaid reimbursement rates for Connecticut hospitals.

The health center, which includes UConn's medical and dental schools as well as the John Dempsey Hospital, has watched the state's role in funding its operations gradually diminish.

The hospital always has been entirely self-funded, while the academic operations rely on a combination of state aid, tuition, research grants - and, more recently, transfers from hospital revenue. So the facility that needed special state assistance a few years back, UConn officials say, now is keeping academic programs funded.

The health center's annual budget this fiscal year stands at $660 million, with about $355.1 million going for the academic programs.

Since 2001, UConn officials have watched the state block grant grow, on average, by less than one-half of 1 percent per year.

Since 2002, John Dempsey Hospital has transferred more than $19 million of its revenue to the teaching programs. UConn now is seeking about $20 million in total over the next two years to address this "academic gap."

That's because the hospital is facing its own problems, running close to $22 million in the red this fiscal year. UConn Vice President Lorraine M. Aronson said John Dempsey, like other Connecticut hospitals, has watched state payments for treating poor patients cover less and less of actual treatment costs.

Hospitals traditionally have withstood the impact of shrinking Medicaid assistance by shifting some of that onto private-pay patients. But John Dempsey's patient population is shifting, and it now ranks fifth statewide in terms of treating Medicaid patients, while its numbers of private-pay and federally-funded Medicare patients are down.

The Farmington hospital also is relatively small, with only about 220 beds. And it also reserves about half of those beds to treat psychiatric patients and prison inmates, leaving just under 110 beds for general surgery and other medical procedures.

Aronson said John Dempsey, because it is a state-owned hospital, must pay its staff the same costly health, pension, and other benefits provided to state employees, a burden private hospitals don't face. UConn estimates this costs the health center an extra $10.6 million per year.

The Appropriations Committee has endorsed providing the extra funds for fringe benefits.

Genuario said the health center "does have significant problems and we're prepared to look at many possible solutions."

He told the committee that he expected raising Medicaid rates would be part of that discussion, but declined to say whether the administration would back any specific level of increase.